On Wednesday the 2nd of May 2018, the Government introduced the Tenant Fees Bill into Parliament, and tenants and landlords should be aware of its implications. It is important to remember that there will be different views relating to the Tenant Fees Bill
The Residential Landlords Association, RLA, has stated that they believe the Tenant Fees Bill will be a missed opportunity to make a genuine impact on the private rental sector. The fact that the bill will not be made law for months and then will no doubt take many months to implement is a stumbling block that means that many of the features and benefits will not be realised.
RLA wants more transparency relating to fees
The RLA also believes that faster regulation changes could be implemented which would see a greater level of transparency surrounding agent fees. No matter what your personal views on the Bill are, a greater level of transparency is unlikely to be a dreadful thing for people, unless you have something to hide.
Mind you, there are groups representing tenants who believe the Tenant Fees Bill to be of immense importance and benefit. Generation Rent is a tenant lobby group and they have said that the ban on letting fees cannot be implemented soon enough. Dan Wilson Craw is the Director of the Organisation and he released a statement saying; “Right now, letting agents can charge what they like to a captive market of renters, which makes moving house too expensive. Without these rip-off fees, renters will find it easier to move out of unsuitable homes and have more confidence to challenge poor practice and rent increases.”
Regulation is essential with respect to Tenant Fees Bill
For the Bill to be effective, it will have to be regulated properly. As an example, since May of 2015, lettings agents have been required to publish details of any fees they charge and an agent that doesn’t comply with this regulation could face a fine of up to £5,000. However, the National Approved Letting Scheme undertook a study last year and found that after two years of the law being implemented, 93% of councils involved with the process had yet to issue a single financial penalty to any agent who had broken the law.
In fact, across the whole of England, only three penalty notices had been served. The same study found that 59% of councils stated they didn’t believe that displaying fees was a priority for Trading Standards to deal with. Only 45% of councils said they would carry out reactive enforcement work.
The RLA has called for better enforcement of the law as opposed to focusing on removing letting agent fees.
Another concern with the Bill comes with the Office for Budget Responsibility stating that the banning of fees could lead to tenants being charged more for their rent. It will not be a shock to find that some landlords decide to pass additional costs or lost revenue on to their tenants, and this is a situation that will likely impact on tenants after the new Bill is in force.
At Spencer Harvey, we help tenants and landlords, and we know that there will be many different thoughts and opinions on the matter. If you want to stay informed with what is happening here, you can give Spencer Harvey a call on 0161 480 8888 or send us an email at info@spencerharvey.co.uk. For a free valuation please visit: https://www.spencerharvey.co.uk/valuation-enquiry.